The world continues to shift towards technological nationalism and it’s concerning Europe. Three European companies are worried about The Great Semiconductor Separation that is occurring between the United States and China, where each wants to build a self contained semiconductor ecosystem.
The CEOs of Europe’s three biggest computer chip makers on Monday said that demands by the U.S., Chinese and European governments that each region have its own semiconductor production are a worsening obstacle to business.
In a rare joint appearance following the election of Donald Trump to the U.S. presidency for a second term, the CEOs of Infineon (IFXGn.DE), opens new tab of Germany, French-Italian firm STMicroelectronics (STMPA.PA), opens new tab and NXP (NXPI.O), opens new tab of the Netherlands said their businesses have been suffering from uncertainty and the trend toward nationalist industrial policies seen over the past decade.“The danger is that we will accelerate in this fragmentation,” said Infineon CEO Jochen Hanebeck at the electronics conference in Munich.
“Fragmentation is happening on the supply side, and potentially with tariffs, which are written on the wall, it will get worse”, he said.
Well, fragmentation is actually a good thing. The United States cannot be utterly dependent on Taiwan and China for its semiconductor and electronics supply.
Those obstacles to business are inevitable. I do think Europe is a safe place to locate semiconductor ecosystem capacity but that will only probably occur once the American ecosystem has better footing… because at the moment things are pretty shaky. Intel is NOT doing well and they represent significant US based manufacturing capacity.
Tech nationalism is the industrial policy of the future. The CHIPS Act is most likely here to stay and the United States will hopefully follow up with a CHIPS Act II. China itself just announced they’re going to build a new 28nm fab.
I think that Europe should institute their own nationalist tech policies to ensure their domestic supply of semiconductors and electronics as well. It is just as unsafe for them to rely on Taiwan and China as it is for the United States. And just because you want to believe bad things don’t happen, that doesn’t make it true. Europe needs to wake up. The threat of a US – China conflict over Taiwan is very very real.
Ultimately this again shows us that tech nationalism will continue in China and the United States and Europe is going to complain about it the entire time instead of acting. Wake up.